China Next Winners: More than AIDD - drug development in the AI age

This report is part of a series on China Next Winners in which we identify the next generation of healthcare AI drug discovery winners in China. AI is moving beyond a niche tool toward a more mainstream part of China's biopharma industry. From 2023 to 3Q26, AIDD companies have more than quadrupled pipeline counts from 47 to 219 assets, while AI-related licensing deal value has grown to account for ~25% of China-origin licensing activity. Yet the evidence so far suggests AI's contribution remains in accelerating discovery rather than improving clinical success. The industry's focus is shifting from generating more molecules to generating better biological insight. We find little evidence today that AIDD programs consistently outperform traditional pharma in Phase I or Phase II advancement rates. We think winners in the AI era will extend beyond pure-play AIDD companies, with three winner archetypes: (1) frontier AI companies that develop leading foundation models and generative design p